Spurred to action by complaints and concerns from postal workers in New Jersey who have found themselves on the wrong end of hypodermic needles protruding from poorly wrapped packages, Pallone decided to introduce a bill this week to ensure safe mail.

The proposed measure would require senders of medical waste to clearly identify contents on the outside of packages and would require that all such packages be sent by registered mail. Often, this medical waste comes from small rural companies or institutions without local access to a disposal site, a spokesman for Pallone said. The waste usually is mailed to a firm which then disposes of it, he said.

By taking the packages out of the regular mail stream, Pallone's bill would cut down on the number of postal workers who come in contact with the medical-waste items.

The registered mail process -- requiring signatures from the recipient and the shipper -- would also enable easy tracking of "unscrupulous waste shippers," Pallone said.

Postal workers have been injured handling medical waste as it is transported through the mail system. The hazardous materials include containers holding potentially contaminated blood, urine and hypodermic needles.

Postal regulations have long permitted the mailing of etiological agents, biological specimens and other biological products, as long as they are properly packaged.

These rules were revised in 1989 specifically to address the needs of safely packing specimens and other medical-waste items, including the mailing of glass and syringes.

While supportive of the bill, representatives of postal workers would rather have such hazardous waste eliminated from the mail altogether.

Annual report:

In his yearly report to Congress yesterday, Postmaster General Anthony M. Frank advocated a 1-cent increase in the price of a first-class stamp, rounding out the cost at 30 cents.

In written testimony to a subcommittee of the Senate Committee on Governmental Affairs, which oversees the postal service, Frank also said he intends to enhance the commitment of employees by "building a credible internal communication program, improving employee feedback and working relationships and providing motivation for improved performance."

Although he was regretful that this year's contract negotiations with clerks and letter carriers had to be resolved through binding arbitration, Frank said he believes the final decision offers "modest wage increases" that will give the postal system a "fighting chance to keep increases in our costs below inflation."

The four-year binding arbitration agreement allows the postal service to pay new hires 10 percent less than the current starting salary, to use more part-timers and to hire more temporary employees.

Temporary workers are important to fill the postal service's goal of entirely automating the letter processing system by 1995, Frank said.

Frank also said he would like to improve labor relations. "Perhaps with additional work, we will be able to resolve our major labor contracts without recourse to binding arbitration," he said. A federal district court has rejected a proposal by the Office of Personnel Management to compute back pay to special rate employees for the years 1982 to 1988.

The U.S. District Court in Washington ordered the office to compute back pay in a way that will ensure that the salaries of special rate employees keep up with salaries for comparable jobs in the private sector.

The order resulted from a class action suit filed by the National Treasury Employees Union on behalf of special rate employees.

These workers receive "special" salaries that are higher than those of regular Government Service employees because their positions are significantly more lucrative in the private sector. Without a special salary rate, the federal government's ability to recruit and retain qualified employees for these jobs would be hampered.

The court, rejecting a proposal that would provide regular GS increases to the special rate employees, ordered OPM to review the amount of special pay needed to recruit and retain employees in certain occupations and locations.

Under a new formula, OPM must guarantee that special rate pay will stay in line with the pay for similar jobs in the private sector, NTEU President Robert Tobias said.

The ruling "is a clear message to OPM that it must stop shortchanging special rate employees and start obeying the law," Tobias said. "A full back pay award is long overdue and we expect OPM to follow the court's order."